Implications of the Rural Health Transformation Program

In late 2025, the Centers for Medicare & Medicaid Services (CMS) announced a historic $50 billion Rural Health Transformation (RHT) Program that will channel new federal dollars to all 50 states over five fiscal years (2026–2030). Beginning this year, states will receive roughly $10 billion in aggregate annually through cooperative agreements, with first‑year state awards averaging about $200 million and ranging from roughly $147 million to $281 million.

The RHT Program is structured to balance a “floor” of guaranteed funding with targeted investments where rural need is greatest.

• All 50 states applied and were approved for this funding, so every state will receive an award beginning in 2026.
• 50% of annual funding is distributed equally across states, while the remaining 50% is allocated using factors such as rural population, facility and workforce needs, and the expected impact of each state’s RHT plan.

CMS is explicit that RHT dollars are designed to underwrite comprehensive, state-led rural health strategies rather than narrow, one-off projects.

Key priorities for these dollars include:

• Access Expansion - New primary care, maternal, behavioral health, and oncology access points; mobile clinics; and hub‑and‑spoke models that keep more care local.
• Workforce Capacity – Recruitment and retention incentives, training pipelines for rural clinicians, and new career pathways for students interested in rural health.
• Infrastructure and Technology – Facility modernization, telehealth expansion, cybersecurity, interoperability, and digital tools such as AI-enabled documentation and care coordination platforms.

What healthcare leaders should be doing:

For rural hospitals, FQHCs, and physician groups, the arrival of RHT funding is as much a strategic planning moment as it is a grant opportunity.

• Map your footprint against the state’s RHT plan: Understand your state’s priorities, timelines, and lead agencies, and identify where your sites or partners align with targeted initiatives (access, workforce, infrastructure, or innovation).
• Build an investment‑ready project pipeline: Package high‑impact projects, such as telehealth expansion, care management, or revenue‑cycle modernization, in ways that directly support your state’s RHT objectives and metrics.
• Strengthen rural partnerships: Explore clinically integrated networks, hub‑and‑spoke arrangements, and cross‑continuum collaborations that position your organization as a “go‑to” implementation partner for your state.

As the Rural Health Transformation Program in 2026 moves from award announcements to implementation, the real differentiator for rural providers will not be how large their state’s check is, but how strategically they align with state priorities and position themselves as indispensable partners.

For organizations in states like Ohio, where total dollars are significant but lower on a per‑rural‑resident basis, success will hinge on bringing concrete, investment‑ready projects in areas such as maternal health, oncology access, digital infrastructure, and workforce pipelines to the table. It will be imperative to tie those projects directly to measurable gains in access, outcomes, and financial sustainability for your entity.

MMG can help your group translate each state’s plans into opportunities, work to develop fundable project and grant packages, and manage the RCM and implementation infrastructure to make awards successful.

If you have questions about the Rural Health Transformation Program or how to prepare for its impact, we’re here to help. Please reach out to Ronnen Isakov to schedule a conversation.

Ronnen Isakov is Managing Director Advisory Service of Management Group, LLC. His background includes extensive work in areas including business advisory, valuation, network optimization, transaction support, and project management.